Elizabeth Edwards 'Disgusted' by Rielle Hunter's Photos but Has Moved On

Jaws dropped nationwide when Rielle Hunter’s provocative photo shoot and interview with GQ hit the Web Monday morning. But what did Elizabeth Edwards think when she saw it?

“She was disgusted by the photos like everyone. But she moved on pretty quickly,” a source close to her admits to PEOPLE in the issue set to hit newsstands Friday.

Determined to tune out the scandal and create a new life for herself, Elizabeth has taken up painting, is writing a new chapter for the summer release of the paperback edition of her 2009 Resilience, and is organizing a mother-daughter book club for her and Emma Claire, 11, her sister, Nancy Anania, tells PEOPLE. “She seems to be happy and at peace.”

Moving on. That’s also what John Edwards, her estranged husband and “Johnny” to former mistress Hunter, is trying to do, says a close friend of his.

The disgraced former presidential candidate, under grand jury investigation for possible misuse of campaign funds to pay Hunter, “is rebuilding his life, but separately” – from both Elizabeth and Hunter – and focusing on his children, says the friend. And, despite Hunter’s claim in the GQ interview that she and “Johnny” still “love each other very much and that hasn’t changed,” the friend of John’s says he’s only in touch with Hunter to check on Quinn, their 2-year-old daughter and that the notion that he and Hunter will wind up together is “total fantasy.” RELATED: Rielle Hunter Repulsed By GQ Photos, Says Barbara Walters

For more details about John and Elizabeth’s lives now and their reaction to the latest revelations, pick up the new PEOPLE on newsstands Friday